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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
          EXAMPLE 7.2  Golden Valley Manufacturing
               By replacing its assembly line conveyor with an asynchronous conveyor, Golden Valley Manu-     facturing will save $50,000 per year in rework, inspection, and labor costs. The asynchronous              conveyor will cost $275,000, and its life is 15 years. There is no salvage value. If Golden Valley       uses       a 10% interest rate, should the asynchronous conveyor be installed?
Creekside Consulting is comparing the purchase of a computer network with leasing it. The purchase price is $36,000, or the network can be leased for $3000 per month. In either case, Creekside expects to use the network for 3 years, when it plans on an upgrade. If Creekside buys the network, its salvage value is $5000 after 3 years. What is the IRR or cost of the lease?
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